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9/30/2013 8:30AM

The Implications of a Washington Shutdown

A government shutdown looks likely after a weekend of hardening positions and lack of negotiations. The budget standoff is spooking businesses and consumers and three stock picks to lookout for. (Photo: Getty)

This transcript has been automatically generated and may not be 100% accurate.

... the ... some ... of the session ... House position which is ... based at the same one that said as the last time is going to rejected again ... and were to face the prospect of the government shutting down ... come midnight Monday night Tuesday morning ... the president so one saying I will shut down government if he'll give me everything I won on Obamacare ... that to me is the president ... being intransigent and being unwell and a copper mine ... we're less than twenty four hours in the end of the fiscal year and there is no deal to fund the government insight ... good morning welcome the New Saab ... on Michael Casey ... the funny to present a bomb is health care overhaul becoming the mother of all sticking points ... Congress's two warring tribes is so far failed to reach a ... compromise ... with a competing budget bills ... was a government shutdown inevitable ... Washington bureau chief Jerry Sithe joins us with the lettuce ... the morning Jerry ... good morning ... to visit the look of a game of chicken Jerry is anyone able to pull him aside and avoid a collision before the midnight deadline ... well there's a very simple answer that that is avoided it if the House Republicans bling and then my you know I think that what's going happen today at the beginning the day is pretty predictable Housel convene the day ... it will reject what the house to send on this Tuesday the Senate will convene at midday or reject the house and over which is a bill funding the government ... for the next three months ... aam but of stripping out all of money for ... Obamacare for the next year when your delay in Obamacare that's not to pass the Senate ... clean CR in Washington jargon which is to build the fund the government for the next few months will go back to the house ... and then off to the side of the house will they ... accept that ... or will they reject it and in which case the government has spent the night is a very simple equation right now ... I think there's a reason we and to what might happen tonight ... is the House Speaker John Binner might pull out of this drawer ... a bill to fund the government for short amount on a week to week something like that to avoid a shutdown get the house to pass that ... some Democrats are probably vote for that would be hard for this to say no ... end in this drama just continues for a while that's the least one plausible outcome that doesn't solve the problem ... to prevent a shutdown ... that we we took off their abilities that you did get some sleep plus Robertson says this to me that there really isn't ... oh the silly was a lot of news coming out of a not as if there really isn't ... that publicly at least a scrambling to reach a deal with what we read from that ... well that makes this different from the last couple of crises and there's a certain Groundhog day element to this crisis you know we've gone through twenty eleven through twenty twelve ... things get pushed to the brink of this question with the government can find itself is a question of when the debt ceiling will be racing that's looming out there just ahead as well ... but that difference was that in those last two cycles ... there was a lot of a backroom talks serious backroom negotiating going on between the White House he wanted no war between the Senate and House ... this time there's not a mean that was nothing to do yesterday in the sense that nobody was ... talking nobody was doing anything there was no negotiating going on so ... I'm that the Lions are pretty clearly drawn here as is said that the question at this point is simply what the Republicans back down there's nothing else to negotiate a or sumthing of being negotiated readily describing forces if that speak to buy and the ball really is in his court ... this quickly don't laugh if you will ... how What's AFB him going one way or the other on this ... well I did there is a tightrope act in this entire speaker ship has been for the last three years a time of that ... aam on the one hand if he doesn't convince people in his caucus to let him put forward something that funds the government without a Obamacare provision on it ... of the government shuts down Republicans kind of know ... that they're giving the plane for that for the Democrats are he could be a serious political problem the other hand ... if the forces something like that on to the floor is conservatives revolving us to pass something to fund the government ... with Democratic votes more than Republican votes ... on his leadership within his own Republican conference is to be seriously eroded so ... how does he strike a balance between those two that's the story of the day-to-day absolutely Jerry thank you for your time we will stay tuned ... sure ... in this battle who will be left standing as the winner ... the history of costuming shutdowns office and died owing to mock has been a witness to history ... the Brookings institution fellow with the stock for the White House tree last shutdown in nineteen ninety five ninety six ... and is an expert on governance she enjoys is in Washington this morning ... good morning aligned ... what a ... so what you must walk is an RN for this to the rebel ... publicans in house end up with a political squabbles or is present Obama the winner ... also the late President Obama is the winner of that's the lesson from the last government shutdown ... the ninety five ninety six ... aam president when one day handily on is the end of a U K his leadership ... I and we didn't think to do this again for seventeen ... years on ... the reason Reverend is that I make sure the people understand it's not partisan statement that President Obama will be when ... it's built into the structure of the system ... only the president speaks for everyone ... then there's the hands of speaking for you know the individual constituents and then there was the two that's why ... they're doing is ... in talks to everyone and to the country as the fall ... is not crazy about the idea of shutting down the debt ... there's a big difference The with ... this time around this is the new cubicle in the attack and that is that in fact of course is not being led by the state of the banner is ... that the divine is something ... of a liberal often participant if anything ... in the real drivers coming from the minute is renegade tea party activists ... that what what does that add to the story that Chile's copper thanks to some extent ... well so I mix it worse and they say even even more clear that the president will come at the winner ... on you've got in these cases enter an extraordinarily weak state in the US ... I remember us be here to let one section of his party ... and in your inner out of the way these guys are jerking around ... the announced the end it's just unbelievable and so not only does the countries that country so disgusted by this oh eight is plain but ... still they cannot control his party cannot control his coalition ... that's ... a good job with his BK is is to put it all together and ... make it happen and it is the can do that then have to wonder how long is the issue is likely to last ... you had a twenty one day shutdown back in ninety five and sixty with their toes into the weekend with the move was blocked and it's ... how this thing plays out in the White House ... if we if we get there is a buffoon than mine ... the first thing that happened says and it happened last Thursday and Friday is that ... employees get told when they are essential for non essential ... if you're essentially get to go to where and ... when I get paid if not essentially it over and all you're not ... here legally not allowed to go where ... so there were travel light has offices in oh seven hundred there were about thirty of us in the White House ... it was ... quite an intense period of time and and and is the shutdown threat than it was like when I'm Levine said its license of the country because ... people love to hate what he did ... what they don't realize is that Washington funds most of what a delight ... so I re started shutting down ... charity is ... to close its doors as most of its funding was from the federal and ... state and local government programs which people bought where ... local programs funded by local ... writers ... turned out to ... be shut down as they were funded ... by federal dollars ... they say it's the money to a dance number of ... different kinds of organizations ... state government federal government ... for prostate and non for profit organizations ... so when that stops all the ... people around the country started realizing when it ... we don't markets and it ... may be a good at being a real black eye for the Republicans ... are pressing plan from the end and sat down on ... me and age to bolster reelection in nineteen ninety six ... even the constant threat to the inside was that ... the staff in Washington is making this is new this poses a real risk of U S economy ... that's next ... now to take a look at how markets are handling the brawl in Washington with joined by MoneyBeat host and blogger Paul ... vignette good morning call my Casey hell are you doing console shut down all the time of great and that ... that that ... is ... exactly what we could interview him as the funding of what what ... that is is pretty exciting market rate now ... on Dow futures down about a hundred forty five points right now to keep using Internet sixteen of the interest on that ... so the ... equities market is reacting to what's going on in Washington ... but long this is is a lot of business sentiment of momentum and stock for a record high ... just about ... under two weeks ago ... only off about two three percent from the level so ... I wanted to look why am I going to take the reins at twenty percent year already ... likely to risk right now ... take some money off the table if nothing happens you get into the light Penney from browsing to bid ask spreads we are ... being kept out why women season of the massive selling out at the table wherever you go and it's it's almost on move from prime sell ... the bond market is really no reaction to what's going on in the stock market reaction against stock market moves very jittery very best plot for a pot so ... you know ... don't put too much fundamentally to intervene in the Stock Market grammar but my sense is that we do get what they did it did so devastating it would spin with its all like some headlines now this afternoon ... it's a turnaround ... three stocks to research not get on the little guy ... what quickly get a good one The ... our friends over the course broke the story that the mini file publicly their IPO papers this week ... and it seems like they wanna move pretty fast with this so they could get a call with having gone through and they do it ... they can start training for Thanksgiving so that is interest government shutdown might might unload if the government sector ... I do one thing was that it owns Dasani eyeshadow but he really come ... across an analyst at the time so keep an eye and ... J C Penney and the stock is down around ... the city ... was around he said the region ... as far as I can tell ... you treat it that that will be a twenty year low ... looks like a twenty year low in two thousand the trading and sixty three and entry to ... so to fall below that at least a twenty year low to the stock is just sliding its offering ... the reader a slot money things delivered indiscriminate sex paycheck in Tuesday night beating Peter processor human resources that has a ... lot of small businesses so these these numbers ... the viewer through the said what ... I expected report earnings after the bell ... basically flat the euro ... Paul thank you so much ... mall ... MoneyBeat later on ... Polish public inadequacies you just did this is impacting the economy will come back and talk about that ... it's ... we don't fully understand ... what might happen ... the dangers involved because ... no Congress has ever ... actually ... drive and the fall ... what we know it would have a profile to de stabilizing effect on the entire economy ... on the world economy ... just good ole and this is us through what what's going on a nation's capital ... backed up the good news for the broader economy ... joining us to discuss his Sudeep Reddy in Washington good morning city ... the morning Michael ... to be the prettiest of a shutdown of the Xobni the bid nondescript be something of an on again for markets in the economy Daily ... is a reasonably this one might be different ... this one is a little bit different because you have the a potential Government shutdown ... bleeding into a fight ... over the raising the federal borrowing limit the debt ceiling ... in mid October so putting those two together can create some bigger affects both in terms of confidence among investors and ... businesses and consumers and also in the ... actual facts because if you have people pulling back ... due to heightened uncertainty that could cloud the outlook for months ahead ... what we're seeing right now it isn't indications in indicators in this regard ... well we've Artie seen in consumer confidence come down ... of the last few weeks we've seen business confidence come down with a one survey of big businesses specifically citing the budget battles ... as a reason why they weren't hiring and weren't investing as much as they would be otherwise ... ended up be on that you've seen some gauges of uncertainty that are based on ... business surveys and it ... the market measures like the credit default swaps ... tied to really pop up higher due to ... fiscal uncertainty so all this together are just the beginning we are already in a fairly choppy economic environment ... both in terms of business investment ... of course in terms of job so ... this is obviously not to be a good thing it can run as use it to sell it and the Datsun debated mistakes is the real goal for the dream here whatever time frame to be had for that one is that why you become an issue ... it really depends on whether the government goes into a partial shutdown ... on Tuesday if we do see a shutdown ... then that the clock starts to see how much ... lawmakers are going to be fighting ... how long they're going to be fighting it if that buying leads into the debt ceiling ... debate here to see some really serious to dislocations in markets see probably have about a week ... of more playing around in Washington before ... you have some some serious problems in terms of ... of the market gauges that could affect the economy but of course if you get closer closer to that that October day ... then you start to see some things fall apart even if there's eleventh hour deal and we don't see a default on the federal debt ... of ... the getting to that point to be fairly painful we have to ... figure out what a way to ... navigate through that without getting up point ... we are unified suit a week after that ... Co-op could get pretty rocky ... City thank you very much his time ... thanks Matt so we had time full for now thank you very much for joining us on Michael